Washington has been busy signing deals to secure America’s rare earth supply, but none of it will be ready before 2028. That gap is a cost passed on to whoever wasn’t at the table when the strategy was designed. Automakers have already cut production over magnet shortages, and rare earth prices outside China have climbed as high as six times Chinese levels , a cost that could reach car and appliance buyers if the supply crunch deepens.
Soon after entering office, the Trump administration waged a trade war with China, which dominates the mining of rare earth minerals like neodymium, praseodymium, and dysprosium used in the permanent magnets inside EVs and appliances. China’s grip is even tighter downstream, where it holds a near-monopoly over global processing and refining . The United States was 67 percent net import reliant in 2025 , importing 21,000 metric tons (MT) of rare earth compounds and metals. Of those imports, China made up around 71 percent .
The trade war aimed to cut dependence on a supplier that has sanctioned U.S. firms and wielded export control as leverage . Though diversification is smart, Washington moved too hastily to burn bridges with China, as the effects of its supply chain replacement won’t materialize for years.
The first bottleneck is acquisition. China holds roughly 59 percent of the world’s confirmed reserves of rare earth elements. Countries like Brazil and Australia— with about 15 percent and 8 percent, respectively —seem positioned to fill the gap, but clear obstacles remain. For one, Brazil’s extraction industry is still nascent . USA Rare Earth, an American rare earth and magnet producer, struck a $2.8 billion deal for Brazil’s only scaled producer, Serra Verde. However, this deal is tied up in a Brazilian antitrust review , with no guaranteed timeline. Moreover, Brazil’s relationship with the United States has soured—President Lula da Silva has been critical of the U.S. Navy’s interventionist policy in South America and the Trump administration as a whole .
Australia signed a Critical Minerals Framework Agreement with the United States pledging a combined $2 billion in financing within six months for critical minerals projects broadly, without a fixed commitment to exports. But Lynas Rare Earths, Australia’s flagship producer, committed 75 percent of its heavy rare earth oxide output to Japan , meaning there’s a hard cap on what it can send to the United States.
None of these partners can deliver enough, and in time, to substitute for what China currently supplies.
So, what about countries with unconfirmed minerals? In 2025, Kazakhstan discovered new deposits totaling up to an estimated 20 million tons (based on preliminary sampling). The recent C5+1 Critical Minerals Dialogue—attended by Kazakhstan, four other Central Asian nations, and the United States— emphasized the acquisition of rare earths . Astana also recently acceded to the U.S.-led Pax Silica initiative , signaling further economic partnership. Unfortunately, the timeline isn’t as tight as it seems. Arthur Poliakov, executive chairman of the Mining and Exploration Forum, believes that Astana won’t begin production for another 10-12 years .
The timeliest solution, then, is domestic production, something the Trump administration has prioritized. The United States has plenty of rare earth deposits, like the Round Top project in Hudspeth County, Texas. USA Rare Earth was awarded a $14.2 million grant from the Texas Semiconductor Innovation Fund to begin building extraction infrastructure there. Despite faster-than-expected progress, these efforts remain nowhere near China’s scale; the company is targeting late 2028 at the earliest to begin operations.
But mined output isn’t immediately usable. Refining isolates individual elements into a usable form. The largest rare earth separation plant outside China is in Malaysia , backed by significant foreign investment. Lynas Rare Earths has poured over $1 billion into the Kuantan facility since 2012, becoming the largest commercial producer of separated rare earth elements outside of China. Malaysian miners have long exported their products to China , but the government has banned exports of unprocessed rare earths to facilitate its “mine-to-magnet” mission. Even so, the Kuantan plant remains focused on midstream refining . Even there, China holds 80-90 percent of global separation and refining capacity , while controlling the entire downstream chain from magnets to finished components. Importing from Malaysia, in other words, doesn’t solve the problem—it just moves the chokepoint.
Domestically, the United States can produce around 1,000 MT of magnets per year. However, USA Rare Earth is also building a refinery alongside its extraction project, estimated to finish in late 2028 , to complete its mine-to-magnet pipeline. It recently announced a $1.2 billion investment into a South Carolina facility that is expected to bring total production capacity to about 10,000 MT per year. MP Materials, which can already do light mineral separation in California , is betting $1.25 billion on a magnet manufacturing campus in Northlake, Texas, bringing its total output to 10,000 MT per year on the same 2028 timeline as USA Rare Earth’s facility.
Total U.S. magnet consumption—including ones embedded in imported equipment—was 40,000 MT in 2024 . At roughly 20,000 MT per year, the 2028 buildout covers just half of current consumption—and a shrinking share as demand is projected to rise well above 50,000 MT by 2030 . Closing the gap with China, then, requires stacking domestic production with partnerships that aren’t open until at least 2028.
That’s the best-case scenario. Every deal signed in Astana, every groundbreaking innovation in Texas or South Carolina, is progress—but it’s measured in years, not months. Until then, the bill for closing that gap will land in the same place it always does: the price tag on your next car or refrigerator.
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